Before the launch of the “Belt and Road Initiative”, the People’s Republic of China (“China”) had been largely seen as a capital-importing State. With the initiative’s implementation, China has increasingly taken on the role of a capital-exporting State. To reflect its dual role in global investment flows, China has concluded new bilateral investment treaties (BITs) and has modernised its existing BITs. This new generation of Chinese BITs features broader access to investor-State dispute settlement, more precise definitions of “investor” and “investment”, more clarity on investment protection standards, alongside an emphasis on the host State’s right to regulate.
Prominent examples include the 2015 China-Türkiye BIT, which modernized and replaced the 1990 agreement; the 2023 Angola-China BIT; and, more recently, the 2024 China-Venezuela BIT. On 1 April 2025, China’s Ministry of Commerce published on its website the Chinese and English texts of the China-Venezuela BIT, indicating the treaty has now entered into force following mutual ratification. Key features of the treaty are set out below.
Broad definition of investment. The China-Venezuela BIT provides that a qualifying investment must have the “purpose of establishing economic activities in the territory” of the host State and comply with domestic law. Additionally, a qualifying investment must possess certain characteristics, including a commitment of capital or other resources, expectation of profits, an assumption of risk, and a specific duration. Unlike the well-known Salini test, there is no requirement to contribute to the host-State’s economic development. Furthermore, a qualifying investment must not use assets or funds originating from the host State. Excluded from the definition are public debt instruments and portfolio investments that do not grant an investor a significant degree of influence over the enterprise’s management, as well as decisions and awards by courts, arbitral tribunals and administrative authorities.
Ensuring treaty protections to State-owned enterprises. The China-Venezuela BIT stipulates that an “enterprise” under the definition of a qualifying investment includes State-owned enterprises. This reflects the significant investment activities of Chinese State-owned enterprises in Venezuela.
Limited scope of a qualifying investor. The China-Venezuela BIT explicitly excludes dual-nationals from the treaty’s protections. Also, the host State may deny the treaty’s benefits to an investor that is an enterprise where it is (a) directly, indirectly, or de facto controlled by individuals or enterprises from a third State and lacks substantial business activities in the other State Party; or (b) directly, indirectly, or de facto controlled by individuals or enterprises of the host State.
Right to regulate for public interest. Multiple provisions of the China-Venezuela BIT affirm the host State’s right to regulate in the public interest. In addition to text in the BIT’s preamble, the treaty explicitly recognises the host State’s right to regulate in order to achieve public policy objectives (such as protecting public health, safety, the environment, labour rights, and public morals). The treaty also clarifies that non-discriminatory legal measures enacted to achieve these objectives do not constitute indirect expropriation, which aligns with text in the 2023 Angola-China BIT and the 2012 Canada-China BIT.
Limited MFN, FET and FPS provisions. The China-Venezuela BIT excludes dispute settlement from the scope of the most-favoured-nation standard, meaning that investors cannot invoke more favourable dispute settlement provisions from other treaties. The treaty also states that the fair and equitable treatment and full protection and security standards are limited to the minimum standard of treatment under customary international law.
Dispute settlement mechanism. The China-Venezuela BIT follows China’s recent trend of expanding access to investment treaty arbitration. After a six-month cooling-off period, an investor may choose to resolve a dispute with the host State through one of the following fora: (a) a competent domestic court, (b) ad hoc arbitration under UNCITRAL Rules, or (c) any other arbitration institution and rules as agreed by the parties. If an investor opts for arbitration against the host State, the investor must waive its right to initiate or continue any other proceedings related to the contested measure before the host-State’s domestic courts or any other dispute settlement forum. Additionally, the treaty establishes a “fork-in-the-road” clause, which means that, once an investor selects a dispute resolution forum, the choice is final.
The text of the 2024 China-Venezuela BIT is available here.